BA 342: EXAM 2

Sustainable Development (Bruntland Commission Definition)

"Development that meets the needs of the present without compromising the ability of future generations to meet their own needs"

Emmanuel Acho

"Uncomfortable Conversations with a Black Man"

Smeal College of Business Sustainability Definition

"the way companies manage financial, social, and environmental risks and opportunities to ensure resiliency over time" -markets, communities, and businesses that thrive because they are intimately connected to healthy economic, social, and environmental systems

Federal Laws Prohibiting Job Descrimination

**All laws that apply to us 1. Equal Pay Act (1963) - prohibits sex discrimination in payment of wages - must file a complaint within 180 days - problem is that it takes an employee longer to realize that her pay is lower - Lilly Ledbetter Fair Pay Act 2009 effectively undid the court's decision 2. Title VII of the Civil Rights Act (1964) - prohibits discrimination in hiring, promotion, discharge, religion, sex or national origin - gave EEOC authority to file suits against employers - prohibits firms from retaliating 3. Age Discrimination in Employment act (1967) - protects workers over 40 from discrimination in hiring, promotion, discharge, religion, sex or national origin - Employment based on ability than age 4. Section 503 Rehabilitation Act (1973) - prohibits job discrimination based on disability - applied to employers holding federal contracts - requires them to engage in affirmative action to employ the disable 5. Pregnancy Discrimination Act (1978) - treat pregnancy as any medical condition (no maternity leave required) - four months paid maternity leave, guaranteed job when back 6. Title I Americans with Disabilities Act (1990) - prohibits discrimination from mental or physical disabilities in private employment and public accommodation -firms expected to make reasonable accommodation if doing so does not represent undue hardship - covers qualified individuals with disabilities, those who can perform essential functions of the job 7. Civil Rights Act (1991) - increased financial damages and jury trials in cases of intentional discrimination - permitted to awarding both compensatory and punitive damages

Lightbulbs and Stakeholders

**What's the impact if we eliminate incandescent bulbs? - Individuals: decrease choice, cost saving, replacement, resistance to change, disposal & recycling - Companies: business model change, maintenance, regulations, competition, savings - Gov't: politics, decrease in resources, regulations, incentives, systemic change - Environment: use less resources, less waste, disposal issues, energy saving, decrease in pollution, lower carbon emmissions

Equal Employment Opportunity Commission (EEOC)

**know graph trend - Federal body created to administer job biases - Five commissioners and a general counsel appointed by the president and confirmed by the senate - Makes equal employment opportunity policy - Staff receives and investigates employment discrimination charges - chart page 186 notes

Triple Bottom Line (AKA ESG)

*3 P's* 1. Profit (Economic) 2. Planet (Environment): is our business model environmentally sound? 3. People (Social): are we treating our people well? -economic, environment, social = corporate language (Assumption is that everyone has a business model that makes money)

Issues Related to Regulation

*Costs of Regulation* 1. Direct Costs: more visible costs associated with increased agencies, aggregate expenditures, and growth patterns; costs of adminitering regulatory agencies 2. Indirect Costs: forms, reports, questionnaires, etc to satisfy requirements of regulatory agencies 3. Induced Costs: innovation may be affected (lesser resources towards research), new investments in plant and equipment may be affected, small business may be adversely affected

The Diversity Progression

*IN ORDER* 1. Affirmative action 2. Diversity training 3. Managing diversity (1964 to today) **All came up at different times but are fully and completely in play today

Circular Business Model (Economy) pg 110 notes

*Make - Use - Return* -RM--> design--> prod. man.--> distribution--> consumption (use, reuse, repair)--> collection--> recycling--> Residual waste or REPEAT -choose raw materials more carefully -design for sustainability -manufacturing = zero waste -distribution = efficient, close together, less fuel **people are moving more towards circular --> comes from industrial ecology -page 110 in notes defines perceived importance of circular economy to organizations: getting more important (Green Biz UPS 2016 study)

3 Big Why's / Big 3 Drivers of Sustainability (First Tier)

*Order of importance* 1. Population growth 2. Intensity resource usage rate 3. Climate change - Three lenses: Scientific, political, economical

Linear Business Model (Economy) pg. 109 notes

*Take - Make - Waste* - Cradle to the Grave -design--> RM--> Production--> Use--> Disposal -how we've done business forever -model is being rapidly dismantled -examples: Ford F-150, Lexus RX350, umbrella, juice box (nowhere to put when these things die)

Diversity Component: Senior Leadership (Driven by Top Management)

*most important* 1. Vision 2. Resources 3. Accountability - Today 53% of Fortune 500 companies have a Chief Diversity Officer or equivalent

Tragedy of the Commons

- "Commons" represents our environment -squares = something common available to all -operating in own best interest -growth and economic development --> able to grow --> everyone has 1 cow, then get 2 -white space = air, water, land, etc. --> we don't think about the commons --> everyone has only thought about *their own self interest* -at some point you have overwhelmed the commons --> ended up overwhelming everyone - Self-interest is likely to lead individuals and organizations to behave in ways that will not sustain our resources - Schuykill Expressway example: great road in the 60s, tragedy of the commons killed it --> many exits --> economic development (food, gas, industrial) --> road is overwhelmed --> building out of *own self interest*

J&J Diversity

- #1 Company for diversity - Ursula Burns: first black female CEO of a fortune 500 company -don't give up

Sustainability Business Case Data

- *Leadership:* McKinsey study; 76% CEO's sustainability performance key to long term growth - *Operations:* Dupont; past 10 years energy project cut cost $2 bil, GHG's down 75% - SHRM 2011: *Phase 1 (Compliance): 48% *Phase 2 (Integration): 45% *Phase 3 (Transformation): 7% - *Customers:* McKinsey study; 87% customers care about environmental impact of products they buy, 54% willing to pay premium for sustainability - *Investors:* Bloomberg study; since 2003 market grown 22% annually, now at 26.5 tril (15% total) - CEO sustainability rationale: 72% brand rep, 44% revenue opp, 42% personal, customer, employee initiative, business impact, govt, investor initiative -SRI funds are outperforming DJIA - Sustainability Importance *BOD: 49% V.Imp, 45% Imp *C-suite & exec: 46% V.Imp, 45% Imp *Manager level: 26% V.Imp *Non manager: 17% V.Imp

IPCC (Intergovernmental Panel on Climate Change)

- 1988, International body for assessing the science related to climate change -What they do: -Compile data and create reports -organize conferences -coordinate international treaties - Provide policymakers with regular assessments of the scientific basis of climate change, its impacts and future risks, and options for adaptation and mitigation - IPCC Assessment Reports cover the full scientific, technical and socio-economic assessment of climate change -Boss of climate change for the planet -How does climate change work in the world?

GRI (Global Reporting Initiative)

- 1990's pioneers sustainability reporting - Now adopted by 100 of organizations around the world in over 90 countries - Building and maintaining trust in business and gov't - Multi-stakeholder approach in development of standards - Goal: increase transparency - *Framework for reporting sustainability* - (1) Enabling Policy (2) More Reporters & Better Reporting (3) Moving Beyond Reports (4) Innovation & Collaboration

Regulation

- A Federal Regulation Agency: *Has decision making authority *Established standards/ guidelines benefitting and restricting business conduct *Operates in the sphere of domestic business activity *Has its head/members appointed by the President *Has its legal procedures governed by the Administrative Procedures Act

Environmental Legislation

- A slew of recent legislation for companies to comply with - In the EU *RoHS *WEEE *EVL *Waste tire directive *Green Dot Packaging directive - These directives were driven by increasing concern for the environment - Expensive for companies and consumers - In the US *Conflict Minerals *Slave (forced) Labor - More pending globally *Japan *China *Australia (immediate adoption of WEEE and RoHS) *Possibility of 50 different producer responsibility directives in the US

2. Diversity Training

- A training approach - Effective communication and culture --> unity and understanding differences - Less effective: attitudes and bias (point out faults) - *ATTITUDE vs. BEHAVIOR* --> Attitude = very difficult to change a person's attitude --> can't control --> Behavior = can change --> must act professionally - Started in the 1970's, still going on today

Risk Mgmt & Sustainability

- Actuarial, enterprise, real estate - Environmental, social risk - Economic, industry, physical, & political risk - avoid, reduce, transfer, retain risk - regulatory, compliance, litigation - NGO's impact on business - Public pressure - BIG Issue: environmental and social risk = enterprise risk (VERY strong impact)

Adam Werbach: Saatchi & Saatchi S (Marketing & Sustainability)

- Adam Werbach: environmental activist, developing sustainable strategies - Define sustainability: need the needs of current generation without sacrificing needs of future generation - *Four Sustainability Components:* (1) protect the environment (2) care about cultures (3) social responsibility (4) economic sustainability - How to use sustainable strategy to empower innovation - TEN cycle: (1) transparency (2) engagement (3) networking (outside the business with NGO's) - Solves 3 problems: (1) helps a business develop better products that cost less and are more efficient (2) engage employees, increase productivity and increase retention (3) sell more products

Population Maps (Migration)

- African American: North, southeast --> result of slavery --> reflection of history --> large cities ]= migration for jobs - Hispanic/ latino: southwest, Miami - Asian: east and west coast cities - American Indian: reservations

Interaction of Business, Government and the Public

- Although govt may be the official representative of the public, we should not assume that representation occurs in a straightforward manner

Teachers Retirement - CalTers (S) Investments (Risk Mgmt & Sustainability)

- Better governance, integrity, higher returns, - ESG principles, env, social, governance - strong risk analysis - 2019 Global Risk WEF graph pg. 160: likelihood vs impact

Umbrella Trade Associations

- Broadest representation - Chamber of Commerce - National Association of Manufacturers - Business Roundtable - National Federation of Independent Businesses - State Chambers of Commerce - City Chambers of commerce

Clash of Ethical Beliefs

- Business belief: *Individualistic ethic *Maximum concession to self-interest *Minimizing the load of obligations society imposes on the individual *Emphasizes inequalities of individuals - Govt belief: *Collectivistic ethics *Subordinate of individual goals and self-interest to group and group interests *Maximizing obligations assumed by individuals and discouraging self-interest *Emphasizes equality of individuals - Govts considers themselves inspectors regulators and punishers of business transgressions - Businesses consider govts as obstacles, constrains, impediments to economic progress - Mckinsey Survey: 50% of business people expressed serious frustration with govt intervention, govt doesn't understand economics of industry, blames business for society problems, hard to determine how to work productively with govt

SASB (Sustainability Accounting Standards Board)

- Capital markets have investors - Vision: envisions a world where a shared understanding of corporate sustainability performance allows companies and investors to make informed decisions that drive value and improve sustainability outcomes - 1973: FASB - Only 20% of value is based on tangibles, need to know underlying social and economic impact - Mission: develop and disseminate sustainability accounting standards that help public corporations disclose material, decision-useful information to investors *integrated reporting

Privatization

- Changing a public organization to private control or ownership to capture the discipline of free market and spirit of risk-taking - Producing vs providing a service - Arguments for: publicly owned companies are less efficient and less flexible - Arguments against: certain business activities cannot be safely handled by private sector, ex: federalization of airport security - Privatization works best when the pursuit of profit does not work against larger social goals - Nature of top mgmt, functioning of the board, strategic actions of the firm all contribute to privatization strategy's success - Success largely depended on context

Corporate Political Spending

- Channels through which corporations can make political contributions - Can contribute to corporate funds to trade associations and other tax exempt groups that will subsequently support a candidate or cause - Arguments for: *First amendment: right to free speech and that not only individuals, but also groups of individuals, have that right *Limiting groups' right to political advocacy would violate free speech of the people who belong in that group *Corporations and unions have the right to express political opinion - Arguments against: *Corporations have access to large amounts of money and that creates a serious imbalance of power *Possibility of agency problems, managers may promote their interests rather than that or shareholders' *Business is not likely to focus on common good *Golden rule of politics: he who has the gold, rules

Driver #3: Climate Change

- Climate framing - TIME article (1973): The Big Freeze vs. TIME article (2007): the Global Warming Survival Guide -Scientific: many people interested in studying -Political: grants, give money, competition among nations -Economic: cost and innovation expenses - Bottom Line: Global govts have concluded that the world "must" address GHG emissions and climate change (UN and IPCC), agreements to address this impacts global business leaders directly through (1) incentives, (2) regulation and (3) public pressure

Closed Loop Supply Chains

- Close supply loop chains consist of primary supply chains, secondary supply loops of the whole product, its components, materials etc - A supply loop is constrained when a process cannot deal with the entire output of its upstream process - The reasons can be: *Limited access to used products *Limited technical feasibility of reprocessing *Limited market demand for the reprocessed secondary resources

Expanded Traditional Focus: Diversity Characteristics

- Color - Disability status - Sexual Orientation - Gender - Race - Age - National origin - Ethnicity - Religion

SAS Company on Sustainability

- Commited to making a difference -*about creating new product ideas (innovation) that turn into revenue* -*part of their business model --> have products that are being used to help other people assess what they're doing in sustainability* - Solar farm on carrie campus provides 1.7 million kW hours of clear renewable power each year, enough to power 150 avg sized homes - Solar farm offsets CO2 emissions by 1,600 tons annually, same as burning 167,00 gallons of gasoline - No trees cut down to build solar farm, eliminated need for concrete support by driving steel post in compacted soil, sheep to maintain grass under solar panel - Solar thermal system provides water for gym, laundry, cafeteria - Reducing energy demand: regenerative drive elevators, use efficient variable frequencies motors, power generated during ride helps power electrical equipment - LED's , CFL's , automated energy management systems - Low flow plumbing technology saved more than 5 mil gallons of water, irrigation and drought resistant plants help save 14 mil gallons every year - Recycling: veg scraps are turned to compost and use n flower beds on campus. Eco advocate employees collect recyclable materials and educate, committed to recycling maters, toner, laptops, batteries and other electronics - Green building: US green building council and LEED certifications, designed to use less water and energy, one third construction material contains recycled material, source material within 500 mile radius - Toronto HQ: first building to achieve LEED - UK: Bronze accreditation from ITM ICARUS by reducing CO2 emissions related to staff travel - Korea: eliminated 5000 paper cups by using ceramic mug - Australia: reduced energy consumption by 18% equivalent to removing 50 cars - management of green initiatives: internal efforts, solutions for sustainability, other companies can measure, manage and report CSR -their turnover rate is 4% compared to the rest of the industry at 22%, saving them $100M

Political Action Committees (PAC's)

- Committees organized to raise and spend money for political candidates, ballot initiatives and proposed legislation - Connected PAC's: associated with specific group and can only rais emoney for that group - Nonconnected PAC's: accept funds from any individual or organization - Leadership PAC's: nonconnected PAC's by politicla leaders - Super PAC's: resulted from judicial decisions

Sustainability Investing (Finance & Sustainability)

- Common sense approach: traditional financial analysis that incorporates governance, social, environmental - companies that implement SI perform better than their counterparts - mitigating risk, fulfilling fiduciary duty, creating value - $1/$9 can be classified as a sustainable investment (now more) - Dow Jones Sustainability Indices - Env, social, gov't factor - IBM: financials not the only cost - According to GreenBiz, global SI assets surged to $30 T in 2018

McKinsey Resource Revolution (Innovation Example): From crisis to opportunity

- Constraints in food, land, energy, and water all across the planet - 9 billion people all consuming resources - Challenge to humanity and innovation - Resource scarcity is driving the third industrial revolution - 2005: rapid rise in energy, gold, steel prices driven by realization that 2.5 billion people were entering middle class and not enough resources to go around - How can we sustain economic growth? - 2010/11: Realization that resource prices is a massive opportunity than threat - Trends moving very fast driven by industrial and information technology - Gas and solar gas (2007: USA importer of natural gas 2011: USA largest producer of natural gas); both growing 20% per year (very fast) - Beginning of new it technologies affecting many domain - Enable to capture productivity growth that we need and more - Idea: innovation, infrastructure and information technology -one of the ways to manage resources is by creating new ways to provide resources **greater utility using less resources

US Government in Environmental Issues

- EIS (Env Impact Statements) - EPA (Env Protection Agency) 1. Air quality legislation: Clean Air Act (protect human health, property, vegetation, climate), emissions trading (reduce a particular pollutant) 2. Water quality legislation: Clean Water Act (quality protect marine life, and human interaction with water, eliminate discharge of pollutants into water channels) 3. Land related legislation: Solid Waste Disposal Act (nontoxic waste management), Toxic Substances Control Act (disposal or hazardous waste) 4. Endangered species: Endangered Species Act (preventing harm to species endangered or threatened)

ERG's

- Employee resource groups/ affinity groups - CISCO Report on ERG: *Product Development *Marketing Externally *Communicating Internally *Gov't Relation & Public Policy *HR Policy & Benefits *Recruitment & Retention *Global Development *Community Outreach *Cultural Assimilation *Supplier Diversity

Mgmt & Sustainability

- Environment/Social Strategy - Organizational Culture and Development - Recruitment/Retention - Employee engagement (social & env.) - Performance Systems & Compensation -Stakeholder MGMT - sustainability governance outcomes - Human Capital MGMT - Careers in sustainability Big Issue: (S) Strategy, engaging stakeholders and driving culture

1. Affirmative Action

- Equal Opportunity, Address Discrimination - Definition: Taking positive steps to hire and promote people from groups previously discriminated against - *Applies to Three Different Sectors* 1. Employment (business) 2. Education 3. Government Contracting - Accelerate the movement of minorities in the workplace, by drawing from underutilized talent pool - Started in the 1960's, still going on today - Argument For: Compensatory justice; when injustice is done, compensation is owed to injured parties - Argument against: Reverse discriminaton

Cotton Gin Impact

- Era #1 - Eli Whitney (1793) - Technology benefits and side effects, business initiative - Benefits: faster, more efficient labor - Side effects: More slavery for more people to pick cotton (pg 184 chart)

Plessy vs. Ferguson Brown vs. Board of Education

- Era #2 - Plessy vs. Ferguson (1896) *Segragation legal *Separation but equal - Brown vs. Board of Education (1954) *Segregarion illegal

Industrial Policy

- Every form of state intervention that affects industry at a distinct part of economy - Attempts to identify winning industries and foster their growth, redirecting resources from losing industries - Recommendation for new ventures: funding research, tax policy that rewards risk, competitive field friendly to new entry - Govt has bailed businesses out during crisis; smart for govts to require equity in return for aid - Success largely depended on context - Examples: Geothermal energy, lightbulbs

Wally Triplett

- First black football player in Penn State (1945) - University of Miami game, said Wally wasn't invited, team decided not to play - 1948: Cotton Bowl Origin - "We Are Penn State": One Team, We play all or none - First black football player to get drafted in the NFL - Coach Franklin: those who sacrifice before allow us who come after to thrive

Economic Regulation

- Focus: market conditions, economic variables, entry, exit, prices, services - Industries affected: selected (finance and banking, railroads, aeronautics, communications) - Examples: Civil Aeronautics Board, Federal Communications Commission - Current trend: Re-regulation (within financial stability)

Social Regulation

- Focus: people in their roles as employees, consumers and citizens - Industries affected: all industries - Examples: Equal Employment Opportunity Commission, Environmental Protection Agency, etc - Current trend: Re-regulation (Consumer Financial Protection Bureau, etc)

Coalition

- Forms when groups realize that they have something in common and join forces - Support for individuals or organizations - Ad Hoc Coalition: Lobbying to address a particular issue for a particular period of time

Sopra Steria Culture & Change (Mgmt & Sustainability)

- French IT company - Goal: empower employees to deliver sustainability activities "Green agents" -taking actions to reduce company's carbon footprint --> employees biking to work - Not only deliver, but also get a sense of feeling that they are sharing the future - Share information, use tech tools internally to educate and empower - Awards, certifications - 1 day challenge: environment theme - over-communicate your goals! mgmt has to be involved

What Business Lobbyists Do

- Get access to key legislators (connections) - Monitor legislation - Establish communication channels with regulatory bodies - Protect firms against surprise regulation - Draft legislation, slick ad campaigns, direct mail campaigns - Provide issue papers on anticipated effects of legislative activity - Communicate sentiments of association or company on key issues - Influence outcome of legislation (promote helpful legislation, defeat harmful legislation) - Assist companies in coalition building around issues that various groups may have in common - Help members of congress get reelected - Organize grassroots efforts

30% Club Initiative

- Goal of achieving a minimum of 30% women on FTSE-100 boards - create a set of dynamics structurally that prepares women for Board of Director Positions - Spreading around the world, USA 2014 - 50% coming into company are women, very few in leadership - Cross company mentoring - Higher education initiative - Women for media database

Green Consumers, Employees, Investors

- Green Consumers: customers who express preference for more environmentally friendly products/services - Green Employees: play a major role in promoting environmental practices - Green Investors: want to put their money where environmental values are being identified, interested in advancing social causes

3. Managing Diversity

- Holistic approach creating a corporate environment allowing people to reach their full potential - Addressed both traditional & contemporary issues - Business leverage is the key to success - Senior executive engagement is key - Focus on the business case --> different ways that top companies are leveraging diversity not just because of discrimination and equal opportunity --> also are finding many ways how diversity is meaningful regarding business value

Other Business Drivers (Second Tier)

- Innovation & design - Energy - Water - Waste - Govt regulation - Govt incentives - GHG's (carbon) - Public interest - Non-govt impact - Operations - Facilites - Media

A4S International Integrated Reporting (FASB and SASB) (Accounting & Sustainability)

- Integrated reporting for the future - Goal: transformation of corporate reporting - Influences business behavior - Value creation and preservation

Managing Diversity for the US Fortune 500

- Intro to Diversity - Diversity starts with history - Diversity data info and meaning - the business case for diversity

Role of Government and Businesses

- Issue: What tasks should be handles by govt and what by businesses? - Social oriented goals are not factored into business decision making and processes - Govt has to ensure that goals reflecting social concerns have to be achieved - Govt articulates and protects public interest

Novartis - Diversity & Inclusion

- Key part of their diversity: 1. Thinking styles 2. Different abilities 3. Race & gender 4. Customer 5. Business focus

Dow Jones Sustainablility Index

- Launched in 1999 as the first global sustainability benchmark - Tracks the stock performance of the world's leading companies in terms of economic, environmental and social criteria - Companies report out using GRI framework --> creates indices - Companies want to be highly rated on this list

Triple L (Penn State Strategic Plan)

- Learn (teach) - Live (projects) - Lead (share with others) - Good stewardship = good business - Penn State strategic plan theme for 2016: "Ensuring a sustainable future"

Driver #2: Intensity Resource Usage Rate

- Level 1: CPI "basket of goods" represents our intensity of resource use - Level 2: emerging middle class (read article) - We need 5 Earths for the world population to live equal to the U.S lifestyle - the ecological footprint pg 119 - Bottom line: Developing populations do and will increase the demand for resources. How can businesses assist in supplying greater utility with less resources? - How to change the intensity equation: Conservation and Innovation

Others

- Major employer: govts employ millions of people - Purchasers of goods: one of the largest purchaser of goods from private sector - Subsidies: influences business behavior; made available to agriculture, fishing, transportation nuclear, housing , other special categories - Transfer payments: influences business behavior by providing money for welfare, social security and other entitlement program - Competitor: completes with public sector - Loan guarantees: lends money directly at lower interest rates to small businesses than those of private competitors - Taxation: tax deductibility, incentives, depreciation policies, tax credits - Monetary policy: Federal reserve - Moral suasion: govt's attempts to persuade businesses to act in the public interest by taking or not taking particular course of action

SKF Example

- Make equipment for transportation - *Innovation, intensity and industrial policy* - Innovation = Used alternative energy source: geothermal (using the ground, wells and pipes, to heat and cool a place) - Dug 130 wells, cost the $1 mil, saved half on electricity bill, carbon footprint dropped -Intensity = same or greater utility for a lot less resources - Industrial Policy = Who paid for the $1 mil? SKF, Federal (renewable energy tax credits), State govt, milennials (future tax dollars) ** Incentives!

Kennametal Case

- Make industrial tools; leader in their industry - Latrobe, PA - Case: Plant was ugly with dim lighting; Professor J went on a tour of their facilities and audited sustainability. This cost them $300K but gave many benefits after all. - People: safer, productivity increase, morale, conditions, confidence, community, cleaner - Profit: $900,000 savings/9 months, increased profits, productivity, customers, brand, safety, costs down - Planet: saving energy, less waste, decrease CO2 emissions

Green to Gold (Mgmt & Sustainability)

- Many companies get the point of sustainability - Big upside opportunities, reducing costs, risk and setting business apart - sustainability and our people

Accounting & Sustainability

- Materiality Reporting and Decision-making - FASB to SASB - Assurance & audit practices - AICPA Sustainability Task Force - Dodd/ Frank (must report conflict minerals) - GRI - Energy (carbon reporting) - Sustainability reports - Compliance - *BIG issue: Integrated reporting* (financial/social/environmental)

Why Boys Fail (page 175)

- Men under performing compared to women in the workplace and educational achievement **lack of young men getting an education is a problem in industries - Lowest grades received by boys (2/3) - Females dominating standardized test scores - 89% boys disciplinary action - Chinese grade school: girls dominating education - Current cap favoring girls - IMPLICATIONS: *Talent pool available for the workplace *Need for higher skills from all individuals *Socializing issues in college (60-40 window) *Specialized skills (engineering, sciences, women encouraged to move here, or more men ready for college) *Educational Reform (greater literacy) -racy *Higher crime, drugs/alcohol issues

Sectoral Trade Associations

- Midrange representation; within a given industry or line of business - Trade associations have the disadvantage of battling with each other in their attempts to lobby Congress - National Automobile Dealers Association - National Association of Realtors - National Association of Medical Equipment Suppliers - American Petroleum Institute - American Trucking Association - Tobacco Institute - Health Benefits Coalition - United States Telecom Association

Women in Senior Management

- Most powerful women: Mary Barra, Indra Nooyi, Marilyn Hewson, Ginni Rometty, Abby Johnson - Number of female CEOs in Fortune 500: March 2021 = 41; 1998 =2 - pyramid of Fortune 500 women pg 177 - IMPLICATIONS: *organizational structure/design *workforce planning *flexible work arrangements *leadership succession planning *mentors/coaches/sponsors *childcare, family-care, home-care responsibility *society's attitudes Women and Men/ Business Goals Align

Company Lobbying

- Narrow, specific representation; within company - Washington and State Capital Offices - Law Firms Specializing in Lobbying - Public Affairs Specialist - Political Action Committees (PAC's) - Grassroots Lobbying - Company Based Coalition - Former Government Officials

Externalities

- Negative consequences or side-effects of businesses - "Mandate, regulate, litigate"

Finance & Sustainability

- Operational Profitability - Social impact investing (trillion $) - Investor demand (investing in sustainable companies) - Regulation and incentives - DJSI, carbon markets, energy markets - Incorporate (S) into financial models - Product selection sustainability lens - *BIG issue: fin/social/environmental capital, (S) project ROI and Social Impact Investment*

Political Involvement

- Participation in the formulation and execution of public policy at various levels of the govt - Political strategies are as important as competitive strategies in today's marketplace - Two major approaches to corporate political activity: 1. Lobbying 2. Political spending

History of Government and Businesses

- Pendulum analogy, periods of strong and weak govt intervention - Interstate Commerce Act (1887): Beginning of federal govt regulation of interstate commerce, prevented discrimination and abuses by railroads - Securities act (1933), Securities and Exchange Act (1934): Curbing abuses in stock market, stabilizing market, restore customer confidence - Railway Labor Act (1926) Norris-LaGuardia Act (1932), Wagner Act (1935): Labor legislation - Civil Rights (1964), Water quality Act (1965), Occupational Safety and Health Act (1970), Customer Product Safety Act (1972), Warranty Act (1975): Quality of life

P&G Bob McDonald

- Plants 100% renewable energy - 100% recyclable materials - 0 waste for customers (saved $1 billion) - Waste stream: what are the different wastes coming out?

Disparate Impact (EEOC)

- Policy of equal treatment resulted in unequal consequences for minorities - Look at people as a group - Ex: If criteria is HSD, minorities are less likely to have a HSD - Griggs vs. Duke Power Company Case: HSD or pass standardized test; lots of minorities were excluded from this criteria - Conclusion: it was the consequences of employer's action, not its intentions that determined discrimination - 4/5th Rule: minority group should have success rate of 80% of majority group - Exception: if the procedure was a job related necessity - Secondary discrimination, different results, unintentional discrimination, neutral actions-biased impact, different consequences for different groups

Business Lobbying

- Process of influencing public officials to promote or secure the passage or defeat of legislation - Goal: promote legislation that is in their organizations' interests and to defeat legislation that runs counter to that

Supply Chain and Sustainability

- Product design/development (ratings) - Cradle to grave responsibility - Sustainable sourcing - Material selection - Supplier certifications (associated risks) - Manufacturing/operations (green SCOR) - Distribution/transportation optimization - Disposal/end of life; Closed Loop SC - *BIG issue: sustainable sourcing* in SC, operations, design

Marketing & Sustainability

- Product development (Ex: Scotts tube free toilet paper) - Sales, engaging customers - Sustainable Research; LOHAS - Public relations - Reputation enhancement - Communication (internal/external) - Do not do "greenwashing" (ex. take out 1 bad chemical and brand the product as 'natural' when you haven't actually done anything) - *BIG issues: innovation, product development, "greenwashing"*

Abercrombie & Fitch

- Quote from CEO that he wants the brand to represent good looking, popular Americans - Unwilling to make clothing for larger women - 7 years later, the statement exploded - Boycotts and protests - Charged with discrimination to promote a certain look, aka "Lookism" - Appearance based discrimination can be a legal case as well - Employment discrimination lawsuit against A&F (Mexican American Legal Defense Fund, Asian Pacific American Legal Center, NAACP Legal defense and Education Fund, Lieff Cabraser, Heimann & Bernstien LLP) - Discrimination against Latinos, Asians and African American - Settles for $50 million minus legal costs - 2009: sued for discrimination against hijab - recently, sued for age discrimination - Entrances of A&F surfing theme was ruled to violate Americans with Disabilities Act

Stewardship Model vs. Others

- Stewardship Model: the responsible management of resources - Our license to operate showing the public and government that we are using our resources wisely - Ex: Alcoa **Responsibility: can you do the right thing? - Video: Avatar vs. nature timelapse video

Business Case for Diversity

- Technology industries/Silicon Valley: pummeled for lack of diversity - Mainly white, asian and men - Don't seem to care about making efforts

Trusts and the Federal Trade Commission

- Trust: Organization that brought all or most competitors under a common control that then permitted them to eliminate most of the remaining competitors by price-cutting - Sherman Antitrust Law (1890): intended to control monopolies, outlawed any contract, combination of conspiracy is trade, prohibited monopolization of any market - Clayton Antitrust Law (1914): Outlawed price discrimination, forbade auto-competitive contracts - Free Trade Commission (1914): Maintain free and fare competition, protect consumers from misleading prices

Contemporary Diversity (pg. 181)

- Understanding diversity in layers: "look at the whole person" 1. Organizational dimensions: location, function, seniority, field, union affiliation, department, etc 2. External dimensions: educational background, personal habits, parental status, marital status, appearance, religion, income, etc 3. Internal dimensions: gender, race, age, ethnicity, abilities 4. Innermost: personality - Personality has nothing to do with demographics

Disparate Treatment (EEOC)

- Unequal treatment - employer imposes any criteria so long as they were imposed on all groups alike - I treat you as an individual - Pick out characteristics and say "you're out" - Ex: Refusing to consider African Americans for a job - Primary discrimination, different treatment, intentional discrimination, biased actions, different standards for different groups

McKinsey: How Companies can Adopt to Climate Change

- Value chain risks: Physical (weather events), prices (more fees on fossil fuels), product (electric cars) - External stakeholder risks: Ratings (corporations under a microscope), reputation (trust=value), regulation (govt can change policies) - Read article

Annie Longsworth Video (Marketing & Sustainability)

- Vision: make sustainability irresistable - Core areas, strategy, engagement, communication

World Economic Forum 2019 (page 174)

- companies with below-average diversity scores: 26% average innovation revenue - companies with above-average diversity scores: 45% *companies with more diverse leadership teams report higher innovation revenue

World Resources Institute Climate and Business

- competing globally keeps large companies engages -amazon 2019 climate pledge

Walmart & Paige (Supplier Chain And Sustainability)

- examples of innovative work with suppliers for more responsible use of resources - Paige electric (working as Walmart's supplier): wiring and cable company - zero waste package, reel made by 100% recyclable material 1pac2 - Easy to stack, carry, transport - No splinters -same utility, more profitable, greater stewardship - *Walmart's 3 Main Goals:* 1.4 million people: (1) 100% renewable energy (2) zero waste (3) sell more sustainable products (sustainable score label on products); opportunity, sustainability, community **major players driving sustainability in their company AND through supply chain --> cascade

The American Business Act on Climate

-154 business came together to pledge -reduce emissions by as much as 50% -reduce water usage by as much as 80% -achieve zero waste-to-landfill -purchase 100% renewable energy -pursue 0 net deforestation in supply chains

World Climate Summit 2015

-COP21 --> first time that all world's governments agreed and signed a document acknowledging we are 1 degree above the world average - Results: Limit to 2 degrees celsius, 5 year review, 100 billion/year - 150 countries signed a deal

Diversity and Innovation

-Cisco: I-Zone ERGs input redesigned platform for innovation -Ford: ride and drive; ERGs to understand product design (ex. race an disability) -Macy's: ERG and Hispanic Gift Card Program increased sales -Prudential: LGBT Multicultural Marketing Committee impact entire program

Risk MGMT Major & Sustainability Foundational Statement

-Enterprise Risk MGMT, Actuarial Science, Real Estate -the identification, analysis, assessment, control, and avoidance, minimization, or elimination of unacceptable risks. -an organization may use risk assumptions, avoidance, retention, transfer, or any other strategy (or combo of strategies) in proper management of future events

EAP

-Excellent Performance -Academic Integrity -Professional Behavior

Population Trends (charts on page 192)

-Growth in increasing order *White *Black *Hispanic *Asian - Workforce composition in increasing order: *White *Hispanic *Black *Asian - Ratio of age 25-65 to 65+ is decreasing

Climate Graphs Overview

-IPCC UN Report on Climate Change -1880-1930 below mean temp (satellite measures) -1965-Present above mean temp & rising (surface) -Heatwave Index 1895- 2015 -huge spike in # of 90 degree+ days in 19302 (Dust Bowl) shows impact of climate increases -NOAA data on CO2 in atmosphere: steady upward

McKinsey Study Snapshot: Does Diversity Pay (pg. 174)

-McKinsey Diversity Study 2015: --> gender diverse 15-21% more likely to outperform --> ethnic diverse 35% more likely to outperform -Diversity Top 50 Stock Indexes: --> 2017 Study Diversity Top 50 Beat S&P by: Diversity Top 50: 27.78% (3yr) --> 79.61% (5yr) DJIA: 25.08% (3yr) --> 57.41% (5yr)

Do They Connect?

-Men and women both matter -Pipeline -help women get into senior roles -help young men keep up in school

Kohler: a better way (Circular Economy)

-Nestle Nespresso Aluminum Pods that you can put in a bag and bring to Nespresso store for recycling -aluminum cans (forever) -waste to tile

Industry Risk Example: Carpet (Risk Mgmt & Sustainability)

-OPP and MBAs worked together -1,784 Penn State Buildings -3.3 million square yards installed -28,000 square yards purchased per year -recyclable carpet is more cost effective for disposal -recyclable generates $.10/square yard -costs $.70/square yard to dispose of carpet in the landfill -all other costs remain the same!

How Penn State is Cutting Greenhouse Emissions in Half -And Saving Money

-PSU has been able to reduce CO2 emissions to levels in the 80s

Renewable Energy Tax Credits

-Production Tax Credit (PTC): for facilities -Investment Tax Credit (ITC): for anybody; runs now through 2024 (page 136 notes) *these are incentives!

Sustainability and Business

-Sustainability: meet need of today and not compromise on needs of tomorrow -Triple Bottom Line: Profit (Economic), Planet (Environment), People (Social) -Stewardship: responsible mgmt of resources **mindset--> shelter resources vs. use everything up --> mindset of global directors is all about good stewardship

McKinsey & Ellen MacArthur Foundation Circular Economy

-The environment has a circular model -Can we make a product lifecycle the same? -what if we never "owned" products, but rather leased from the manufacturer?

Corporation Sustainability: Jim Gowen Verizon CSO 2019

-Verizon Green Bond Offering -5G -allows us to have $$ to invest in sustainability

Sustainable Brands: The Good Life

-brands that align business and society on the path to a greater future -prosper in the 21st century -4 Key Elements of the Good Life Initiative: 1. Balanced Simplicity (and living a simpler and healthier life: 36% of consumers) 2. Meaningful Connections (engage in community and environment 28%) 3. Money and Status (having money and the ability to spend it: 26%) 4. Achievement (want to make a difference in career and education: 10%)

Forbes Insights Executive Report

-companies with more diverse management teams have 19% higher revenue due to innovation -over the next 3 years how will your focus change on leveraging diversity for business goals? 78% of companies say increased focus -example: Mattel and Barbie *blonde, white, thing --> diverse body styles, hair styles, ethnicities *at least 10 skin tones, 4 body types, 15 hair styles *this better reflects society, but also is about the bottom line: barbie sales have been dropping, so need to better represent everybody

Oppenheimer Investing & Sustainability Aniket Shah (Director of Sustainable Investing)

-companies/investors who take into account ESG risks increase their returns -positive relationship between sustainability and financial performance

SASB (accounting & sustainability)

-comparable standardized information about environment and social progress for investors -transparency -industry-specific standards that are financially material, market informed, industry specific, and decision useful (for managers and investors)

Ken Frazier: CEO Merck

-every life is treated as though its worth something -people deserve justice

Employees Example - Dell

-generation -sustainability -LBGT -different backgrounds -WISE --> women -GenNext -True Ability -Veterans -Black

LEED (*Leadership in Energy & Environmental Design*) (more on pg 143)

-global standard for measuring the sustainability of a building - US Green Building Council - Standards for every structure that is built (rating system: certified, silver, gold, platinum) - 88 Fortune 100 companies use LEED - ex. Mercedes Benz Stadium in Atlanta -LEED Platinum -highest LEED score of any sports stadium - ex. Smeal business building: LEED Gold -last PSU building without requiring LEED standards

IBM and Stakeholder MGMT: Project Owl & Puerto Rico (Mgmt & Sustainability)

-help: Students, Teachers, Veterans, Victims of Natural Disaster, the sick -trust and responsibility -helping puerto rico with communication

McKinsey 2020 Corporate Talent Pipeline (% Employees by level: pg.177)

-lots of women in the pipeline but losing them along the way -Ursula Burns: -structurally, business is made for men -lack of clear voice representing women -hire them! -structural dynamics: men care about women but not about this -stay-at-home parenting rate is similar to what it was 25 years ago: women contribute a lot more time in unpaid childcare/home-care

Driver #1: Population Growth

-population is changing exponentially -in the 70's, a shift: population was growing so quickly that nations began talking about how to slow it (family planning) -economic stability greatly decreases growth - Scientific lens: all countries in the world measure (people, resources) - Political lens: world leaders get together and talk about providing for its people (UN) - Economic lens: how will we provide goods and services for rising population ($$) - Bottom line: Providing goods and services for 9 billion people by 2043 *Every new person is an economic event: as we add more people, there is greater stress on the environment to provide resources.

Language Check

-sustainability = #1 term today (50% use it now) --> sustainability = umbrella --> underneath umbrella = all things we do to engage with the world -corporate social responsibility = #1 term 20 years ago (25% use it now) -25% = other

IBM Sustainability

-transparent environmental reporting is part of their values -conserving energy, using renewable energy, reducing emissions -Environmental Imperative: environmental challenges + risks, investor requirements, consumer expectations, employee priorities, regulations + legislation

Silicon Valley - Diversity Challenged

-workforce NOT reflective of population -37-48% white

Unilever (consumer products company)

-zero waste --> global footprint -used to have LOTS of waste but began to transform it into products that have value -running business through sustainability -How does this fit into triple bottom line?

Financial Performance Minority Spending (Over $3 Trillion in 2015): Operations Case

1. Buying power 2. Financial Performance 3. Global Markets - S&P 1500: $42 million value increase from increased diversity - Diversity results in higher returns and better firm growth - Decision making: homogeneous vs heterogeneous groups - *Minority buying power $4.4 trillion in 2018*

Impact of Business on Natural Environment

1. Climate change (global warming, greenhouse effect) 2. Energy (energy inefficiency, fossil fuels) 3. Water (quality and quantity) 4. Biodiversity & land use (extinction at a threatening rate, people depending on land) 5. Chemicals, toxins, heavy metals (long run effects accidents, biological damage) 6. Air pollution (global warming, acid rain, depletion of ozone layer, smog, respiratory and other diseases, indoor air pollution) 7. Waste management (Reduce, reuse, recycle, in order) 8. Ozone layer depletion (protect from UV radiation from the sun) 9. Oceans and fisheries (impact on marine environments, sewage and pollutants into water) 10. Deforestation (soil erosion and greenhouse effects)

PwC Sustainability Maturity Path Value Approach (page 137)

1. Compliance mode: reduce operation and compliance risk 2. Obligation (Value protection): expected to do = license to operate, reduce reputation risk 3. Efficiency (Value creation): smart to do = operational cost & value chain savings 4. Leadership (Increasing value): innovation & growth, new business, brand enhancement

Climate Eyes Video: Penn State on GHGs

1. Conservation: reduce need for energy 2. Innovation BP 25-year solar plan -university is still growing, and we are reversing it anyway -"Environmental Stewardship" became a goal in strategic plan -energy committee is given loans for their work, meaning energy plans must pay for themselves and more

Reasons for Regulation

1. Controlling natural monopolies - Natural monopoly: largest firm has lowest costs because of economies of scale and drives out competitors - Potential abuse of restricting output and raising prices - Intervention when companies engage in anticompetitive practices 2. Controlling negative externalities - Spillover effects that result when businesses give rise to unplanned, unintended side effects - Also known as social costs, because they are absorbed by society rather than cost of making the product - By forcing all firms to incur costs, regulation can level competitive playing field 3. Achieving social goals - Using regulations to help achieve certain social goals that serve public interest - Related to negative externalities, ex: lowering harmful gases, hiring more minorities - Keep consumers informed (Consumer Product Safety Commission, product safety standards, truth in advertising, - Preservation of national security, fairness, equity, protection of farmers, allocation of scarce resources 4. Others - Control excess profits by transferring income - Control excessive competition

Sustainability Points of View that Polarize

1. Earth Video: we need to shelter the environment. 2. Avatar: Use up environment neither are great

Government's Regulatory Influences on Businesses

1. Economic Regulation 2. Social Regulation (types of regulation)

Business Components to diversity (Framework)

1. Employees (find/ keep talent) 2. Customers (sales & inventory) 3. Financial Performance Minority Spending (over $3 trillion in 2015) 4. Suppliers (partnerships & regulation) 5. Risk (reputation/ liability) 6. Leadership (driven by top management)

US Race - Era #1

1. Era #1: - Mid 1500's to 1863 - Approx 300 years - Slavery

Smeal 3 Levels for Sustainable Transformation

1. Foundational (what & why) 2. Operational (knowledge & skills) 3. Functional majors (Fin, acctg, etc)

Business View of Sustainability

1. Fundamentals: Environmental impact, the role of companies, core dilemma: tragedy of the commons 2. Eco-efficiency: Pollution prevention, waste reduction, ISO 14000. life cycle assessment, risk assessment 3. Product stewardship: Design for recovery, selling services, extended product responsibility, closed loop supply chains 4. Sustainable strategy: Alliances and communication, product differentiation, corporate social responsibility, sustainable development

BIG 5 Sustainability Standards (Sustainability Reporting) -frameworks for reporting about sustainability factors

1. GRI (Global Reporting Initiative)* 2. Dow Jones Sustainablility Index* 3. SASB (Sustainability Accounting Standards Board)* 4. ISO 14001 (env): 26000(soc) 5. CDP (Carbon Disclosure Project)

Sustainability Standards (Accounting & Sustainability)

1. GRI: What to measure? Provides framework for how to collect data and report 2. Dow Jones: For investors 3. SASB: Video: Standard setting, material, environmental & social impact, 10k form, SASB developing infrastructure)

Business & Stakeholders

1. Government 2. Employees 3. Consumers 4. Owners 5. Community

Unilever and Sustainable Living

1. Improving health and well being (nutrition, health and hygiene) 2. Reducing environmental impact (greenhouse gases, water, waste) 3. Enhanced livelihoods (sustainable sourcing, better livelihoods)

Government's Nonregulatory Influence on Business

1. Industrial Policy 2. Privatization 3. Others

Strategies for Corporate Political Activity

1. Information Strategy: providing information to policymakers through activities such as lobbying, research projects, papers and being expert witness 2. Financial Incentives Strategy: making direct financial contributions, providing desired services, reimbursing travel, paying fees to policymakers 3. Constituency Building Strategy: mobilizing grassroots or business cohorts to work together through public relations, political education, press conferences and advertising

Lighting and Sustainability: using the regulatory environment pg 139

1. LED: Most energy efficient, 6-8W max, $7 each, 20 year lifespan (lasts longest) 2. CFL: Cheapest that is efficient, 13-15W max, $1 each, 10 year lifespan 3. Std: On its way out, 60W max, $.70 each, 2 year lifespan

Risk (Reputation/ Liability)

1. Lawsuits (negative) 2. Public image (positive or negative) 3. Morale (positive or negative) - Companies ranked for diversity: Kaiser, Novartis, EY, AT&T - Ex: Campbells & women: winning with women (diversity), learn about marketplace --> better connect with consumers --> women = 80% of people that buy products --> NEED women on leadership team - Ex: P&G Diversity Recognition --> companies being rated and ranked --> diversity = tracked heavily

IBM Structure of Corporate Sustainability Journey Approach

1. Legal & compliance: base level, follow environmental and social rules 2. Value based and self-regulation: stakeholder model, want to be a good corporate citizen, there are other things that I should be doing 3. Efficiency: money associated with sustainability, companies wake up, start to invest 4. Growth platform: using sustainability as a driver for our business (ex: IBM)

TRIAD #2: Corporate (Understanding Diversity)

1. Organizational: diversity = one of the top 5 leadership competencies 2. National: how to apply US elsewhere 3. Global: different depending on where you are in the world - Diversity is a leadership competency in business

Smeal Strategic Plan

1. Providing extraordinary education 2. Highest quality research 3. Building a culture of: --> 1. integrity --> 2. diversity --> 3. service --> 4. sustainability

Traditional (The Beginning)

1. Race 2. Gender

Employees (Find/ Keep Talent): Talent Case

1. Recruitment 2. Development 3. Retention - Business impact employees: *recruit/ retain *ERG's *professional development *communicating to employees *cultural assimilation *leverage - Terms that apply to you *mentoring (career) *coaching (skills) *sponsoring (access) -ERG/BRG Groups --> designed to help people assimilate into country

3 R's

1. Reduce - Process Design: Pollution, prevention, materials, lean Production, energy, carbon Footprint - Ex: chrome, shiny metal on cars, dangerous 2. Reuse: - Product Design: Servicize, repair, remanufacture, materials choice - Ex: Xerox, lease for 4 years, now charge per image (servicize) 3. Recycle: - Product Design: Design for environment, materials choice, cost benefits, spare part recovery - Regulatory pressures - Last 5 to 6 years: reduction of carbon

Customers (Sales & Inventory): Business Case

1. Responsibility 2. Sales 3. New product development - Ex: Doritos Guacamole- Frito Lay; ERG consulted on new product, marketed to Hispanics to understand their taste preferences, $100 mil in sales - Cisco, Ford, Macy's, Prudential, Mattel

TRIAD #1: Individual (Understanding Diversity)

1. Social - something people care about and disagree over what would be proper protocols (ex: abortion) 2. Personal 3. Emotional **What is your diversity story?

Affirmative Actions Approaches

1. Soft Approaches: - Passive nondiscrimination: willingness to treat races & sexes alike in matters of hiring; fails to recognize that discrimination leaves many employees unaware for present opportunities - Pure affirmative action (largely used today): enlarge the pool of application so no one is excluded; at point of decision to hire, company selects most qualified regardless of race/sex 2. Hard Approaches (Largely not used today): - Limited Preference: Affirmative action with preferential hiring: enlarges labor pool and favors minorities and women - Hard quotas: specifies numbers of proportions of minority group members that must be hired (not really seen today)

Diversity Component: Suppliers (Partnerships & Regulation)

1. Sourcing 2. Gov't regulation 3. Global - Top 10 companies with supplier diversity (MBE, WBE): *AT&T *Dell *Anthem *Wyndham Worldwide *Abbott *Accenture *EY *KPMG *Hilton Worldwide *Marriott International **ranked on supplier diversity --> everyone wants to be at the top

Two Focal Points Of Diversity

1. Traditional (issues around race and gender) 2. Contemporary (lots of other issues)

Organizational Levels of Lobbying

1. Umbrella Trade Associations 2. Sectoral Trade Associations 3. Company Lobbying 4. Ad hoc coalition

Number One GHG (Greenhouse Gas)

1. Water Vapor (H2O) 2. CO2 3. Methane (cows) 4. Nitrous Oxide 5. Ozone 6. Chlorofluorocarbons *Anthropogenic: human-caused climate change

How to change the intensity equation

1. conservation 2. innovation

US Race - Era #2

2. Era #2 - 1861 - 1964 (emancipation, proclamation) - Approx 100 years - Painful/slow change - Amendments: --> 13th amendment: free slaves --> 14th amendment: citizenship --> 15th amendment: voting -Civil War & Emancipation Proclamation

US Race - Era #3

3. Era #3: - 1964 - today (2064) - 50 years - 100 - Civil rights, diversity & inclusion

CHAPTER 12

BUSINESS INFLUENCES ON GOVERNMENTS AND PUBLIC POLICY

CHAPTER 11

BUSINESS, GOVERNMENT, AND REGULATION

2020 New Corp. Investments Addressing Race/Social Justice

Bank of America, Comcast, nike, Walmart, etc. (pg 200)

Supply Chain SCOR Model: Green Sustainability Version

Before SCOR-design for sustainability After SCOR- return, closed loop Plan-Source-Make-Deliver

Diversity Component: Financials

Buying Power, Financial Performance, Global Markets ----> Financials

2017 MIT Sloan Management Review & the Boston Consulting Group

CEO Focus on Sustainability -2021: 84% -2017: 75% -2010: 22% as important to business

Diversity 3 Part Definition

Creating an environment where we (1) recruit, (2) develop and (3) leverage the best *talent* to achieve business goals profitability

Diversity Definition

Creating an environment where we recruit, develop and leverage the best talent to achieve business goals profitability (opens doors)

CHAPTER 19

DIVERSITY AND INCLUSION

Sustainability - The Problem

Designing industrial systems that are economically & environmentally sustainable Company need to find ways for these activities to create value (PROFIT) We have to find ways to accomplish our goals & make money If we don't take action, it's likely we'll be forced to take action

Intensity Bottom Line for Smeal Students

Developing populations do and will increase demand for resources. How can businesses assist in supplying greater utility with less resources?

HSBC Sustainable Finance (pg 157)

Drivers of Green Financing (in order) -premium provided by the market on project value -investor pressure -tax breaks or other incentives -peer group actions/behavior -lower costs of funding -stakeholder pressure/other influences

PepsiCo Performance with purpose and strategy goals/vision; Indra Nooyi retired CEO

ESG in Core Business Strategy -heavy emphasis on strategy -performative purpose: reduce added sugars, reduce carbon footprint, invest in sustainability -being a great company means being a good company -managers need to push these strategies

Regulatory Risk (Risk Mgmt & Sustainability)

European Union Regulations -RoHS (Reduction of Hazardous Substances) -WEEE (Waste Electrical & Electronic Equipment -EVL (End of Vehicle Life) -Waste tire directive -green dot packaging directive -conflict minerals -slave labor and human rights

Accounting Major and Sustainability Foundational Statement

Function responsible for measuring, summarizing, recording, analyzing, assuring and reporting (S) information

CHAPTER Y

GUEST LECTURER: DAN GUIDE

Climate Change Bottom Line for Smeal Students

Global Governments have concluded that the world "must" address GHG emissions and climate change. Agreements to address this impacts global business leaders directly through incentives, regulation, and public pressure.

An Emerging Middle Class

Growing number of people who want a normal basket of goods -pg 119

Human Need for Energy

History Channel Documentary: Afraid of the Dark -what was the world like when we did not have abundant and inexpensive energy to do the things we want? -people did not like to go out in the dark *There is a need for access to abundant and inexpensive energy

The most sustainable car: Prius or Ferrari?

Individually, prius is better, but Ferrari is better on wide basis -design and raw materials -manufacturing and operations -production numbers -customer use (miles/yr) -end of life plan: prius has battery disposal problems, ferrari never dies

MGMT & Org Major & Sustainability Foundational Statement

Integrates sustainability into organizational mission, strategy, culture and stakeholders. Develops human capital to achieve responsible business goals including sustainability.

Diversity Recognition Example

Marriott

Recruiting & Retention 2019 Fast Company Survey (Mgmt & Sustainability)

Millenials -70% Choose Responsible Co. -70% Stay with Responsible co. -training, green teams, compensation, reporting

Financial Example: The Business Case

Minority Buying Power is growing (page 199)

Hall of Fame Diversity companies

Novartis, PwC, Sodexo, EY, Kaiser Permanente, J&J

BlackRock CEO Larry Fink

Our investment conviction is that sustainability and climate-integrated portfolios can provide better risk-adjusted returns to investors. We believe that sustainable investing is the strongest foundation for client portfolios going forward.

Define Discrimination

Overt/subtle denial of opportunity

Leadership Competencies Center for Creative Leadership

Page 171: leading self, leading others, leading the organization

Inclusion Definition

Proactively working to insure all employees' cultures are valued so everyone can contribute to their full potential (keeps doors open)

Kohler Corporation Innovation for Good

Product Innovation Solving SDG Goals Goals: -clean water and sanitation -affordable clean energy -responsible consumption and production *develop products that reach those goals

Country with the highest per capita use of resources? Highest total use of resources?

Qatar; China

PSU Climate Scientists

Richard Alley & Michael Mann

Major League Head Coaches

Rooney Rule: every time we go to hire a senior manager, there will always be a minority candidate. Look at all candidates and hire the best, most qualified person -opportunities for major league coaches needed work

CHAPTER 15

SUSTAINABILITY AND THE ENVIRONMENT

CHAPTER X

SUSTAINABILITY MAJORS

Erik Foley

Smeal Director of Sustainability -Center fir the Business of Sustainability opens July 2020

WSJ best sustainably managed company

Sony: Sony Road to Zero 1. Curb climate change (cut CO2) 2. conserve resources (recycled, reused) 3. Control chemical substances 4. Promote biodiversity -Sony electric car; CEO Kenichiro Yoshida

SCIS Major & Sustainability Foundational Statement

Understand sustainability relevance to product and service supply chains including innovation, product design for circular economy, sourcing procurement, supplier relations, manufacturing, logistics, packaging and distribution

"All-in"

Unity! "divine discontent"

Climate vs. Weather

W: what we see in our local part of the world today C: entire planet, long-term dynamics, impact on society

Jamie Campbell Smeal Assistant Dean for Diversity

What is your diversity leadership story?

Climate Change Contextualized

World Issue -it is a major problem to college students, but some people first have to worry about poverty, hunger, war, etc. -concern varies

Marketing Major and Sustainability Foundational Statement

directly engages consumers thus positioning/promoting sustainable consumption thru product offerings

Equity

distributing resources based on the needs of the recipients: "if equality is the end goal, equity is the means to get there"

Goldman on Sustainability and Low Carbon

drivers of the low carbon economy 1. technology 2. capital 3. policy - intro to the new world of finance and investment banking and sustainability --> capital --> large amounts needed --> investors

Tech companies and diversity

for many years, they did not share their diversity data

Mentoring

helping with your career

Coaching

helping with your skills

Developing Sustainability Culture

internal; alignment in a firm is important!

Diversity Component: Risk

lawsuits, public image, morale

Sustainability & Grand Hyatt Singapore

lots of steps in just about everything they do to be intentional about waste, community, etc

Visa Video

on Rising Middle Class and Rising intensity of resource usage with economic development

Covid and Poverty

page 120 notes

Patagonia Common Threads Initiative

page 147 notes

Sustainability Risk mgmt: Sustainable Environmental Consultants (Risk Mgmt & Sustainability)

page 161

End of Vehicle Life in Europe

producer responsibility to have an EVL plan to properly dispose of it

Diversity Component: Employees

recruitment, development, retention --> Employees

Caterpillar and Xerox: a better way (Circular Economy)

refurbish old machines at a discounted price: "make new again"

Business for Social Responsibility (BSR) (Risk Mgmt & Sustainability)

risk awareness needs to become greater now that we live in a riskier world and face issues such as the rise of authoritarianism, cybercrime, and migration. We will see companies having much greater oversight of risk, and investors will be much more demanding of this than in the past.

EEOC Charges 2002 to 2018 (pg. 205)

still lots of cases that put a huge hit on reputation

Sponsoring

telling mgmt this is a high potential person

Responsibility

the ability or authority to act or decide on one's own without supervision

Workforce diversity is based on...

where you are.